Paper

The first several months of the year are usually slow for many paper stock dealers. After strong demand leading up to the holiday season, production declines while supplies grow.

This year markets have taken the decline earlier than expected.

The old corrugated container (OCC) grade has slumped over the past several months. While the expected oversupply did not appear, demand has been muted. Also, while inclement weather typically plays havoc with transportation of material, so far the problems have been limited.

Mixed paper has followed the slip downward in OCC, though the decline has not been as extreme. While the grade's price has declined, it has held up much better than OCC, which has dropped from more than $100 per ton at the mill to around $50 per ton in many regions of the country.

Old news has held firm despite the newsprint industry's continuing struggle with demand for its finished product. However, Abitibi-Consolidated and Bowater, the two largest newsprint producers in North America, feel that markets are improving, and they are opting to hike finished newsprint prices by $50 per metric ton this March.